Jim Long President – CEO Genesus Inc. email@example.com
Banff Pork Seminar Report
January 18, 2016This past week we attended the Banff Pork Seminar held in Banff Alberta at the Banff Springs Hotel and Convention Center. Our Observations
- The venue of the Banff Springs Hotel was spectacular, nestled in the Rocky Mountains, the view and location when coupled with a Hotel that is one of the best in the world made the Banff Pork Seminar a venue second to none.
- The Hotel had over 500 rooms booked for the seminar and this allowed attendees to be in close proximity for ongoing discussions and attendance at the seminar presentations.
- The decision to move the seminar to the Banff Springs Hotel from the previous location was in our opinion an unmitigated success.
- It appeared to us the attendees enjoyed themselves while being exposed to many different talks related to the swine industry.
- The Genesus reception held the opening night was well attended (278 guests) and this allowed us to meet and dialogue with many customers, industry participants on their perspective of the current and future state of the swine industry.
- Banff as a Canadian event lead to discussions on the devaluation of the Canadian dollar (69¢to the US dollar) and how it is impacting the Canadian pork business. Summary – lower Canadian dollar made Canadian producers more competitive to US producer; labour, utilities, debt all in Canadian dollars creates more competitiveness when coupled with swine prices that are based on the US market.
- Another major discussion point was the recent rescinding by the US on Country of Origin Labeling. Now and in the future the labeling issues that lead to discounts and indirectly restricted the Canadian swine and pork movement to the US will be gone. It is the opinion of many we spoke to this will lead to more small pigs, market hogs, and pork to the US. We do not expect this to head to expansion in Canada but could help sustain production. More small pigs and hogs from Canada also takes away pressure for the US to add sows.
- The demand for small pigs (early wean and feeder pigs) has really ramped up the last few weeks. Feeder pig brokers are calling just about any warm body who might sell some as the demand is so strong. Last week’s USDA prices average cash early wean price was $59.42 and 40 pound feeder pig $68.57, up $11.00 in the last two weeks.
- In Banff this week the chase for small pigs was very evident. We believe a combination of PRRS and AI extender issues have cut production. Large integrated production groups are buying small pigs, they are supposed to be farrow to finish, if they are buying it means they are short production, and are willing to buy pigs to keep their barns, Feed mills, packing, etc. fuller. We expect this demand is very positive for summer hog markets and we continue to believe that they are undervalued on the futures. 85¢ – 90¢ lean per pound would not surprise us.
- One of the keynote speakers at the seminar was Michael McCain President – CEO of Maple Leaf Foods. When a person who has 100’s of millions invested in the swine industry in hog production, Feed mills, packing and processing speaks one should take notice. Truly a person with skin in the game. Maple Leaf Foods is Canada’s largest pork entity.
- Health and Nutrition
- Animal Welfare
- Health and Nutrition – our industry faces the issue of Red Meat (Processed) and whether it is carcinogenic. As an industry we must be vigilant, robust, and proactive in replying to this challenge.
- Animal Welfare – Antibiotics – Maple Leaf owns farms and contracted farms will be 100% loose housing by 2022. Maple Leaf using independent auditors at all farms. Maple Leaf currently the largest single producer of raised without antibiotics animals in North America. Maple Leaf is committed to constructive relations with animal welfare activists.
- Environmental – 80 pounds of meat eaten per capita globally. This will be growing and the environmental challenges with it. Most climate friendly meats are pork and poultry making 10% of Ag Global Greenhouse Gases. The feed efficiency of swine relative to cattle, and sheep makes less of a demand on World grain production while provided meat protein for a growing population. Maple Leaf is committed to cutting its corporate environmental footprint by 25% by 2025. Mr. McCain sees not only environmental benefits but also financial gains by efficiencies gained from less water usage, general waste, etc.
ChinaChina just reported its December Swine Inventory. Following are charts showing the drop in inventory in 2015. About 4 million sows and 40 million market hogs, when coupled with the liquidation of 2014. The Chinese sow herd is down 11.4 million sows and 67 million hogs in inventory! In December despite hog prices in China bringing $300 US per market hog the sow herd decreased about 400,000 sows. We do not have confidence in capitalism. A US market hog is about $100 per head, China $300 per head. Got to figure the $200 spread is very attractive for the Chinese to buy pork and bring pork to China. China will be buying pork as supply and inventory continues to decline and will be price for all hog markets. This week we will be at Minnesota Pork Congress and the following week at the Iowa Pork Congress. We hope to see you there!
This post was written by Genesus